BY AMANDA HARRISON
The Department of Corrections is working to downsize its budget by reopening one of two currently closed prisons with private contractors.
The most recent Request for Proposal, or RFP, would have privatized food and health services statewide. It was turned down by the state for failing to meet the mandatory 5 percent savings.
The decision is laying ground for a larger debate over whether or not the RFP for private management contracts is fair.
The state has one of the largest corrections budgets in the nation, amounting to 1.6 billion last year.
The department of corrections is now looking to cut costs through privatizing services, from food to management.
Republican State Representative Greg MacMaster of Kewadin serves on the appropriations and corrections committees.
He said "overhead" costs are contributing to the state's large corrections budget.
"It's unfortunate that 82 and a half percent of our total budget goes to pensions, benefits and 401k's, 82 percent of our budget, that's absurd." MacMaster said.
The state is working to cut costs by reopening either the Standish or Lake County prison with private contractors. Bids are due in April but MacMaster said he doesn't believe that state will get any in.
"Some of the latest RFP's that have been put out have given a clear indication they have no intent on anybody winning the bid because if any business did they could go bankrupt and that's not fair to the people of Michigan and those that are paying their money to the state of Michigan in taxes, I want to make sure that the RFP process is fair and it is not fair." MacMaster said.
McMaster said another concern with the RFP is that it does not guarantee a private company will get any Michigan prisoners.
"They indicated that the Michigan Department of Corrections would not determine how many prisoners would go to the newly opened prisons. There was no guarantee that there would be any prisoners shifted over there, however if there was going to be a contractor who was going to win that bid, that they would have to fully staff the prison, with services before they could win that bid and again that might not be even fully realized." MacMaster said.
Russ Marlan, with the Department of Corrections, said the contractors would state in their bid how many state prisoners they would like to house.
"Our budget boilerplate language this year contains language that requires us to put this bid out. For custody beds it said that the department shall issue this request for proposal for up to 1,750 custody beds, it's something the legislature is requiring us to do and I think the reasoning is to benchmark our costs." Marlan said.
Marlan said the corrections department realizes the high costs of housing prisoners and are sincere in efforts to be more economical.
"One of the motivating factors for legislators that sit on our appropriations committees is just to see. They know what costs are for us, lets see what a private provider could come in and do it for. So I think it's to create that type of competition." Marlan said.
Curtis Hillman is the city manager of Standish is watching this process carefully. He said he's keeping his finger crossed that the state will reopen the prison in his town.
"It's good for our community in that it creates jobs, it creates maybe 300 or more jobs, I don't know, I haven't heard a number. But it'll bring people to our community, people to buy homes, we have a lot of homes right now that are for sale that people can't find buys. So I think it'd be a nice change to bring these jobs to our community." Hillman said.
But MacMaster said the jobs are still a pipe dream. He said he doesn't believe either of the prisons will be reopened under the current RFP.
Marlan said he's not worried about getting bids.
"We will get bids on it, we've heard from potential bidders, I don't think it'll be an issue, I think we will receive bids." Marlan said.
In the meantime the Michigan Corrections Organization; that's the corrections officers union is watching the issue closely. It said the biggest concern is the safety of prisons run by private management.
We'll hear more on that when our coverage continues tomorrow.